Sustainable Financing More about competence than values

Blekinge Inst. of Tech.

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Sustainable Financing

- More about competence than values –

Prof. Karl-Henrik Robèrt

The Natural Step

Blekinge Institute of Technology

Real Change, Chairman

TBLI, Amsterdam, 12 Nov 2009

Blekinge Inst. of Tech.

SE-371 79 Karlskrona

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The Real Change founding partners

Blekinge Institute of Technology (BTH)

Lund Institute of Technology (LTH)

The Natural Step International (TNSI)

Blekinge Inst. of Tech.

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Real Change - International Research Program

CORE

…Only Unifying Framework

…Largest and longest process

…Core explores and refines the framework, and elaborates tools for analyses, decision support, planning and monitoring.

…Multi-stakeholder base funding including Swedish EPA, Swedish Energy Agency, Vinnova, Formas, Nutec

…Petals are thematic programs from across the globe.

…10 Million USD funding/year

(over and above actions and education from all participants)

Blekinge Inst. of Tech.

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Copyright © 2004 The Natural Step

Individuals Groups

Systems thinking

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Threats Forests Agriculture Fisheries Ground water Climate Metals Chemicals Global justice Trust Stories of meaning

Sustainability is a dynamic challenge

Opportunities Largest financial potential Resource costs Waste management costs Tax, legislation, insurance, loans International agreements Innovation/design/new markets Brand

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Copyright © 2004 The Natural Step

So, what’s the problem?

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Copyright © 2004 The Natural Step

Reductionism

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Copyright © 2004 The Natural Step

Structuredoverview

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Backcasting!

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Sustainable Vision

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- Necessary- Enough- General- Concrete- Distinct

Such principles must be...

Blekinge Inst. of Tech.

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Sounds complicated but is the opposite!

Blekinge Inst. of Tech.

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Just ask three magic questions:

Do you have a definition of sustainability?

What is your gap?

How do you bridge it?

Blekinge Inst. of Tech.

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Sustainable energy potential, Thermodynamics, Linkage to material flows, biogeochemical cycles, interdependencies, resilience and adaptivity…

From System: Society in Biosphere…

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In the Sustainable Society, Nature is not subject to systematically increasing...

* …concentrations of substances

* …degradation by physical means.

and

* … undermining of trust.

…to principles designed for this purpose

Blekinge Inst. of Tech.

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Each (large) investment:

Direction right?

Flexible platform to full compliance?

Good ROI?

Blekinge Inst. of Tech.

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IKEA ElectroluxScandic Hilton Sv. McDonalds…

From action in some Swedish business…

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...to spread to 11 countries...

Blekinge Inst. of Tech.

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Blekinge Inst. of Tech.

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SuppliersClientsStakeholder dialogues

…to value chains…

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Hydro Polymers

• Substances

• Physical encroaching

• Erosion of trust

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Sustainability Evaluation of PVC using TNS Framework

Addressed by a leading environmental authority in the UK and chaired by J Porritt of the PVC Coordination Group

Forum for the Future – licensee of TNS Framework in the UK

What would it take to make PVC fully sustainable?

2020 Vision Exercise - Involving 36 stakeholders at Tesco

headquarters, UK

Report Produced in July 2000- Based on TNS methodology- Interviews with Industry and Greenpeace- Identifies 5 key sustainability challenges

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No more fossil carbon to atmosphere

Closed loop recycling

No accumulation from emissions

No accumulation from additives

Challenging the whole value chain…

5 Hydro Polymer Challenges

Five challenges

Co-creation of distance learning- throughout value chain -

Blekinge Inst. of Tech.

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Distance learning, 10 credits FSSD

Blekinge Inst. of Tech.

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Blekinge Inst. of Tech.

SE-371 79 Karlskrona

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Strategic Partnerships The Natural Step ©, 2009

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

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Present

Future

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AgricultureForestryEnergyTrafficMaterials…

…to sectors…

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- The ”Clinical conference” -

… to municipalities and cities…

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Time

ÖvertorneåSEKO (70 local gov’s)WhistlerCalgaryFCMPortlandAPAEU Round TableChequamegon BayMadison W IPortsmouth NHLawrence NJPittsburgh/VandergriftEvanston ILDuluth MNJefferson County WICorvallis ORDublin…

Blekinge Inst. of Tech.

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Time

WHISTLER

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CompellingVisionCore values

Sustainability principles

Strategic goals

2020 Vision of Whistler – policy, business, civic society

Strategic plansAction programs

CurrentReality

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“This simple, science- and systems-based framework is the best out there. It needs to become part of a new common language, as well understood worldwide as the rules of soccer”.

Ken MelamedMayorWhistler, Canada

Blekinge Inst. of Tech.

SE-371 79 Karlskrona

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ISO14001

Triple bottom line

Sustainable growthFaktor 4

Cleaner Production

Life Cycle

AnalysisZero

EmissionRenewables

RMA

Ecological Footprinting

Sustainability analysis

Ecoliteracy

Factor 10

Hannover Principles

CSR NaturalCapitalism

Miljömålen

EM

AS

EECA

LCA

Ecoeffici

encyAgenda

21

Sustainability

…to tools and concepts

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System Overview

© 2000 The Natural Step. All rights reserved.

Backcasting from principles(like chess)Organization X

ISO 14001IndicatorsLCAEcological footprintsFactor 10Zero EmissionNatural CapitalismInvestments?

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SE-371 79 Karlskrona

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Summary of what we know

We KNOW:• Dynamic game possible to define• Self-benefit inevitable (regardless others)• Problem not if, but how and when• Stepping stones vs. choices between evils• Track-record of competence amongst leaders in business and policy• Mistakes are driven by “cosmetics/penance” (vs. “competence and pragmatism”)

• ONLY one way: leaders LEARN the game so that they can ask the right questions and work across boundaries towards goals

Blekinge Inst. of Tech.

SE-371 79 Karlskrona

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What we know interpreted into method

The organization’s impacts regarding sustainability (defined)• How serious? (scale of impact and contribution)• How acute? (evidence of emerging market)• How exchangeable? (substitution)• Mission how important for others? (innovation for new markets)

↓• Strategic awareness of above?• Strategic communication in-house and outreach?• Evidence of current change?

Blekinge Inst. of Tech.

SE-371 79 Karlskrona

+46 455 38 50 00

www.bth.se/eng

Method interpreted into finance

• Risk assessment of investments, loans, insurance• Assessment of opportunities e.g. new products/markets/alliances • Culturing of clients & long term relationships in general• Recruiting new clients and stakeholder/political dialogues • Staff and education and PR• Track record (Banco Real, Cooperate Bank Manchester, VanCity, Cooperators, Banco Funds, SEB, Fortis CRI portfolio).• Reputation/branding